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A discrete|continuous model of fruit promotion, advertising, and response segmentation

  • Timothy J. Richards

    (Morrison School of Agribusiness and Resource Management, Arizona State University East, 7001 E. Williams Field Road, Mesa, AZ 85212)

Commodity marketing managers are demanding an increasingly detailed description of their customers in order to make more efficient use of their marketing budgets. This study uses a purchase-occasion, household panel data set to investigate consumers' discrete choice among varieties of apples and their continuous decision of how much to buy. We segment households based on their elasticities of response to several marketing variables: price, promotion, and advertising using a k-means clustering algorithm. Describing each of these segments according to their demographic attributes provides the type of information required to target particular groups of similar consumers, which in turn allows for a much more effective and efficient use of scarce marketing dollars. © 2000 John Wiley & Sons, Inc.

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Article provided by John Wiley & Sons, Ltd. in its journal Agribusiness.

Volume (Year): 16 (2000)
Issue (Month): 2 ()
Pages: 179-196

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Handle: RePEc:wly:agribz:v:16:y:2000:i:2:p:179-196
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  1. Capps, Oral, Jr. & Seo, Seong-Cheon & Nichols, John P., 1997. "On The Estimation Of Advertising Effects For Branded Products: An Application To Spaghetti Sauces," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 29(02), December.
  2. Timothy J. Richards & Pieter. Van Ispelen & Albert Kagan, 1997. "A Two-Stage Analysis of the Effectiveness of Promotion Programs for U.S. Apples," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 825-837.
  3. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-12, March.
  4. Lakshman Krishnamurthi & S. P. Raj, 1991. "An Empirical Analysis of the Relationship Between Brand Loyalty and Consumer Price Elasticity," Marketing Science, INFORMS, vol. 10(2), pages 172-183.
  5. Pradeep K. Chintagunta, 1993. "Investigating Purchase Incidence, Brand Choice and Purchase Quantity Decisions of Households," Marketing Science, INFORMS, vol. 12(2), pages 184-208.
  6. Selvanathan, E. Antony, 1989. "Advertising and consumer demand: a differential approach," Economics Letters, Elsevier, vol. 31(3), pages 215-219, December.
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